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Beef supply weighty issue

Rueben HaleThe West Australian

WAFarmers has warned the State could soon face a beef supply shortage, as local producers focus on the lucrative live trade.

Its meat council representative Geoff Pearson said beef industry power players needed to do more to support the best interests of producers, rather than just the interests of the major supermarket chains.

"Producers are supplying supermarkets' trade and specification beef and therefore there is no incentive for them currently to produce a heavy market article in the feedlot," he said.

In WA, Woolworths slaughtered about 90,000 cattle and Coles supplier Harvey Beef slaughtered 55,000 cattle last year.

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Mr Pearson said the supermarkets may struggle to retain the same level of supply if they're not more flexible with carcase specifications.

He said the supermarket beef grid size should be changed from the current 210 to 280kg to 300 to 330kg. Supermarkets currently charge 40c a kilogram penalty for out-of-spec carcases.

"WA will take a long time to significantly increase cattle herd numbers from 1.2 million," Mr Pearson said.

"Live export does not impose these penalties on producers and there is an incentive to supply them with a heavier animal."

To make it more appealing for producers to supply locally, a degree of flexibility was required, he said.

"The current specificiations should be moved to allow the State's growers to produce more kilos of meat because it will be very difficult for producers to increase the State's 1.2 million-head herd size quickly to ease supply shortages," Mr Pearson said.

He said worldwide demand for Australian beef would continue to escalate and predicted the price of beef was likely to hit $5/kg this year.

Cuballing cattle producer and Angus breed enthusiast John Young said he believed supermarkets were bound by consumer demand for smaller portion sizes. Mr Young said it was undeniable the beef market had become more competitive, but industry needed to take a long-term view towards sustainability.

"One of the agents in the South West has lost 38 per cent of his cow herd numbers in the last 10 years because they've either reduced the herd or replaced the decline with grazing cattle," he said.

"In recent years the planets have aligned for the industry with 30 to 40 per cent increase in beef prices coming out of Europe and the US markets.

"And although it's very tempting for producers to let go of their females in the current market they should perhaps take the longer view and breed from them."

Meanwhile, a spokeswoman for Coles said the company worked with industry to create more flexibility for suppliers.

"Over the past 10 years Coles has increased our carcase weight specifications by more than 20 per cent and today's dressed weight specifications are based on customer feedback about the portion sizes that customers want," she said. "Since November 2010, Coles has moved to a direct sourcing model for our beef in WA and we now process 55,000 cattle a year in the State to provide WA customers with locally-grown beef.

"In the past three years, we have also created new markets for WA beef producers by developing a new Coles Finest brand of beef which is sourced from cattle from Geraldton to Esperance."

"Coles is committed to the beef industry in WA."

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